Have you ever wondered if a supply chain can disregard sustainability and still support a thriving business? In recent years, sustainability has gained significant interest as it pushes us to rethink how our actions affect the planet. It’s no surprise that sustainable practices have a deep impact on the future of commerce.
Let’s talk about supply chain sustainability – what is it, why is it important, and how can you manage it? Find out in the article below.
What is Supply Chain Sustainability?
The phrase “sustainable supply chain” refers to how a company’s product journey affects the environment. Sustainable businesses put effort into minimizing the negative effect water usage, energy consumption and waste production have on our world.
Sustainability in your supply chain also means:
- Paperless transactions – EDI eliminates paper usage, minimizes waste
- Having a positive influence on local communities.
- Transparency and clear rules for working with suppliers – real-time communication and collaboration between trading partners, allowing for faster decisions and can lead to better coordination in your whole supply chain also in optimizing transportation routes, reducing fuel consumption, and minimizing greenhouse gas emission.
- Performance measurement and reporting in EDI – can help to define KPIs related to sustainability, such as carbon emissions, waste reduction, or energy consumption.
- Limiting expenses (for example, by optimizing transportation routes). Maintaining a stable level of profitability.
- Efficient inventory management can achieve better control and visibility over inventory levels. This allows for more accurate demand forecasting and planning, reducing the risk of overstocking or stockouts.
- Following legislation for sustainability in many countries helps organizations ensure compliance with sustainability regulations and standards.
To summarize, a green supply chain ensures environmental, social, and economic responsibility. A well-thought-out combination of regulations, technology, and procedures helps companies achieve sustainability in the supply chain, from sourcing raw materials and production, through transportation, to storage and delivery.
What is Sustainable Supply Chain Management?
Effective supply chain management is based on sourcing, production, inventory and transportation coordination to maximize efficiency, customer satisfaction, and return on investment (ROI). Numerous businesses have been able to achieve significant cost and time savings by assessing and enhancing their supply chain management systems.
Traditional supply chain management prioritizes the efficiency, expense, and dependability of operations. However, sustainable supply chain management goes beyond these factors to include the preservation of environmental and social values. This involves tackling worldwide concerns such as climate change, water safety, deforestation, human rights, ethical labor practices, and corruption.
Why is Supply Chain Sustainability Important?
Did you know that more than 90% of greenhouse emissions generated by an organization are attributable to supply chains? A sustainable supply chain can not only reduce the negative impact on the environment but also improve efficiency in your company while saving you money. Sustainability in supply chains can help preserve valuable resources while offering ethical shopping options to customers.
What Are Examples of Supply Chain Sustainability?
Today, you can find sustainable supply chains across many different industries. Here are some examples:
- At Comarch, we encourage the conscious use of energy and natural resources. Among many green solutions, photovoltaic panels enable us to use renewable energy, rainwater collection systems help maintain green areas, and modern ventilation systems allow efficient heat recovery.
- Patagonia, an outdoor apparel company, promotes fair labor practices, uses up to 87% recycled materials, and strives to have 100% compostable and renewable packaging by 2025.
- IKEA aims to only use renewable or recycled materials while creating durable furniture and advocating for mandatory human rights due diligence.
- Lush, a cosmetics company, has made a sustainable supply chain a core aspect of its practices. The raw materials are ethically sourced, turned into products by hand, and not tested on animals. Lush also introduces innovative, minimal packaging, with 90% made of recycled materials.
How to Make Supply Chain More Sustainable
Almost any company can go green (or greener) – your strategy should be built around its specific operations. It’s crucial to analyze your current supply chain and seek areas that could be improved. Assessing opportunities is as important as predicting risks. Setting smart goals for the future and following them is a key factor in achieving sustainable supply chains. Make sure to maintain transparency about sustainability with clients and suppliers.
There are many practices you can implement for supply chain sustainability, like addressing labor practices, waste management, lifecycle assessment, sustainable transportation, and more. These opportunities can take a long time to develop and successfully carry out. How can you get started with an ethical supply chain?
Where to Start When Improving Sustainability in Business
- Shipping. Consumers value brands that prioritize sustainability in the supply chain and want to make environmentally-friendly shipping decisions. Offering a green shipping option at check-out and consolidating items reduces transportation and packaging waste, leading to more sustainable supply chains.
- Packaging. Introducing paper tape, biodegradable packing peanuts made of starch, or even reducing the packing material altogether not only improve supply chain sustainability but also leads to cost and waste reduction.
- Returns. Implementing a remarketing system for returned products greatly reduces waste that would otherwise end up in a landfill. Additionally, by implementing the right return management system, you can save a significant amount of expenses. Processing helps to identify and prevent fraudulent returns, as well as quickly assess the condition of returned items to determine if they can be restocked or resold.
- Invoicing. Comarch’s Electronic Data Interchange can help you decrease paper waste and optimize sustainable supply chain management. Automation in this area offers companies deeper operational analysis and data to inform other strategies and achieve sustainability.
Contrary to popular belief, achieving supply chain sustainability isn’t just about reducing your carbon emissions. It includes waste reduction, ethical sourcing, and social responsibility. With the right strategy, you can also reduce costs and improve your relationship with more eco-conscious clients.
The first step towards a sustainable supply chain can be as easy as implementing our EDI solution. Comarch EDI platform allows you to go paperless and develop improved sustainability strategies. Remember, there are many different ways of achieving supply chain sustainability, so make your choice count.